Bushveld Minerals plans vanadium battery plant to meet soaring power storage demand

By Philip Whiterow for Proactive Investors UK

Bushveld Minerals Limited (LON:BMN) is to move forward with plans for a vanadium electrolyte plant in South Africa after a study predicted battery demand is set to soar.

A paper produced in conjunction with the World Bank’s Industrial Development Corporation (IDC) indicated demand for vanadium redox batteries (VRFB) would peak in 2025-2030 as their use in energy storage systems rockets.

At that time the need for vanadium electrolyte will also likely be at its highest at 40-60 megalitres annually.

Bushveld reckons a new plant in South Africa will be able to produce an initial 5-10ML of this electrolyte, which would equate to 200MWh in annual energy storage.

Initial expenditure on a new electrolyte plant would be 130mln rand (US9.7mln), but this would be reduced by locating the electrolyte plant alongside Vametco, its recently acquired, producing vanadium mine in Brits, South Africa.

Vanadium supply the key

Vanadium is seen as a better and cheaper alternative than lithium for long life electricity storage applications.

“By far the main driver of costs (upwards of 70%) is the vanadium feedstock, making locally available, low-cost supply a critical success factor and natural competitive advantage for South Africa,” the company said.

Bushveld added it has also joined the Energy Storage Committee of Vanitec, the vanadium producers’ trade body, which was launched in 2016 to support and promote the global use of the metal in energy storage.

Fortune Mojapelo, Bushveld’s chief executive, added: “There is no longer any doubt about the growth of energy storage globally to gigawatts of annual capacity and billions of dollars in market opportunity.

“Similarly, favourable factors in this industry, such as the move toward longer duration storage, are increasing the demand and competitiveness of VRFBs [vanadium batteries].

“As we have maintained for three years, the largest threat to the success of VRFB technology remains the supply of low cost vanadium feedstock.

“Following the acquisition of Vametco, we are uniquely positioned to address this challenge”, he added.

Next steps will see Bushveld and the IDC complete a bankable business case for electrolyte production, confirming costs and potential returns.

Possible site locations for an electrolyte plant will also be assessed, which will include Vametco.

Lab work will evaluate the potential quality of electrolyte production at Vametco and while potential routes to market will be sounded out though talks with renewable power suppliers and direct talks with private customers.

Storage market seeing explosive growth

Energy storage is predicted to see explosive growth in coming years. According to the Energy Storage Association, the US market alone grew to 280 megawatts (MW) in 2016 and is expected to reach nearly 500MW in 2017 and over 1,600MW by 2020, with one research house predicting growth of 50-60% per annum for the next decade from a base of roughly 900MW.

Lithium ion technology currently dominates the storage market, but deployment of vanadium batteries in large storage projects is also increasing.

Vanitec estimates the amount of vanadium deployed in installed or awarded VRFB systems has grown from 200 MTV in 2015 to 300 MTV in 2016 to 5000MTV in 2017.

Accordingly, the ability to guarantee supply of vanadium for VRFBs will remain essential to the success of these systems in the medium and long term, said Bushveld.

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